The China Syndrome is alive and well. In todays' world, it just has more to do with nuclear levels of margin debt, not runaway radioactive decay.

If China really gets into worse shape, we’ll see them panic and do everything from weakening their currency to support trade (which will export deflation via prices of manufactured goods), to imposing capital controls, to selling US Treasury bonds to pay for the rescue efforts.

Commodity Bust

Copper

'Dr. Copper' is so named for the metal's uncanny ability to both diagnose current economic activity and deliver a prognosis on future activity. Right now, it's saying the patient is very sick and not likely to recover any time soon:

Copper has just broken through key support (in dotted circles) and looks like it could fall further. Notice the behavior of copper in 2008/09 and you’ll see that paying attention to copper is a good idea.

Oil

Oil has obviously fallen by a lot, with WTIC crude well under $50 again today, signaling ... » Read more

Well, that went badly. For the Greeks in general and for Tsipras specifically. After many years and rumors and brinksmanship, and a powerful "No" referendum from the people of Greece, Tsipras managed to ‘secure’ for Greece a deal worse than any other offered to date. » Read more

In Part 1, we examined the core dynamics that expanded Greek debt to its current unmanageable size—currency/trade deficits and bailouts—and the enormous transfer of private bank debt to the public ledger via the Troika bailouts, only 10% of which trickled down to the Greek people.

There are two other dynamics beneath the surface theater, dynamics which are not unique to Greece but are characteristic of the most heavily indebted nations.

In our recent podcast, Chris mentioned this chart of imported energy by nation. Note that the nations with crushing structural debt loads (the so-called PIIGS—Portugal, Ireland, Italy, Greece and Spain) also happen to be major importers of energy.

What does this have to do with Greece’s debt crisis? Let’s go back to the key driver of Greek debt—imports that far exceeded exports, not occasionally but structurally, year in and year out. Money was borrowed to pay for those imports, interest accrued on the loans and then austerity was pressed on the debtor nations by the lenders as a means of extracting interest on the rising debts.

If a nation does not generate a significant percentage of its own energy and food needs, or export enough goods and services to offset its imports of energy and food... » Read more

It’s pretty hard keeping up with the rapid-fire developments in Greece. Things change every hour it seems; rumors abound and confusion runs deep.

At this point, it all depends on what Greece is prepared to accept and what the EU is prepared to offer. So from here, we could see anything from a full financial pardon from the EU (very unlikely) to a full Greek exit (still quite possible). » Read more